Bankruptcy Dismissal and Discharges
What is a Bankruptcy Discharge?
In bankruptcy a discharge and a dismissal are two different actions that are commonly confused by debtors. A discharge is often sought by those looking to eliminate debt and a dismissal is an action that in most cases, you want to avoid if you are looking to improve your financial situation. A discharge is granted for qualifying unsecured debt; meaning the debt is eliminated and the creditor can no longer pursue the debtor for payment. The action is granted by the preceding court judge and it can be granted in a Chapter 7 or Chapter 13 bankruptcy under certain circumstances.
In Chapter 7 bankruptcy unsecured debt is wiped off giving debtors a clean slate. A discharge is granted in Chapter 13 bankruptcy when the debtor successfully completes the repayment plan; qualifying debt that is unpaid may be discharged as well. Obtaining a discharge may take several months for a Chapter 7 case and between 3 to 5 years for Chapter 13.
What is a Bankruptcy Dismissal?
A dismissal is usually something debtors do not want as the action ends the proceedings of your case but there are different causes for this. In Chapter 13, a case could be dismissed if the debtor fails to make scheduled payments as part of the repayment plan. In either chapter, a case can be dismissed if proper paperwork isn't filed correctly or you've failed to provide information requested by the court.
Each chapter has requirements that should be met in order to file successfully. You case can be dismissed if you fail to complete pre and post-filing requirements such as credit counseling. If false information is provided about your finances, creditors or assets, these actions are also grounds for dismissal. Debtors may not be granted a discharge of debts if the court dismisses the case.
Are You Considering Bankruptcy?
If you are considering bankruptcy but not sure if it is right for you, we can help. If you would like to set up a free consultation with one of our bankruptcy attorneys you can call us or fill out our contact form